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DONALD DEWAR was yesterday forced onto the defensive when one of his senior MPs and a member of his election 'Cabinet' launched an unprecedented attack on a key party strategy.

The Scottish Secretary's unveiling of his 19-strong team was marred by revelations that John McAllion says the party has to end its Nat-bashing policy and should not be opposed to Scottish independence in principle.

The leftwing MP for Dundee East will deliver his explosive views this week at Labour's annual conference, hours before Tony Blair addresses the party faithful.

He was yesterday named as the party's spokesman on the New Deal and youth affairs in Mr Dewar's handpicked election squad effectively Labour's Cabinet-in-waiting.

But party managers angrily played down his comments on independence. In his speech to a fringe meeting at the Labour conference this week, Mr McAllion will urge his party to move from ' i t s Unionist hostility towards nationalism' and take up 'a much more positive attitude towards Scottish identity'.

He will say: 'The Scottish Labour Party exists not to defend the union with England but to defend the interests of the Scottish people. The Scottish Labour Party should not in principle be opposed to Scottish independence.'

Addressing Labour's obsession with 'Nat-bashing,' he will say: 'Nationalism is here to stay, Labour must learn to live with it.' He will insist that the argument between 'British Unionism and Scottish separatism or nationalism is increasingly sterile', adding: 'The future for the UK i s an increasingly stronger Scottish parliament and more devolution for the rest of the UK. …